Nvidia’s Record Earnings Propel Global Tech Markets
Nvidia’s fiscal third-quarter results have not only exceeded expectations but also sent waves across the global tech sector. The company reported robust demand for its AI chips, fueling gains across major tech stocks in the U.S., Europe, and Asia. Even amid some concerns that the AI boom might be moving too fast, Nvidia’s performance highlights sustained and extraordinary demand.
Key financial results of Nvidia for the quarter:
- Earnings per share (EPS): $1.30 adjusted (vs. $1.25 expected)
- Revenue: $57.01 billion (vs. $54.92 billion expected)
- Net income: $31.91 billion (up 65% from $19.31 billion a year ago)
- Next quarter guidance: $65 billion in sales (vs. $61.66 billion expected)
Shares jumped more than 4% in after-hours trading, with pre-market trading seeing a 5% rise to $196.53. If momentum continues, Nvidia could add roughly $243 billion to its market value.
AI Chips Driving Record Growth
Nvidia has become the most valuable publicly traded company, largely due to insatiable demand for its AI GPUs. Its customers include Microsoft, Amazon, Google, Oracle, and Meta, all relying on Nvidia chips to power new AI models. CEO Jensen Huang dismissed concerns of an AI bubble, calling the demand “astonishing” and emphasizing that bookings are already lined up through 2026.
The company’s data center business remains the primary revenue driver, reporting $51.2 billion in sales, surpassing expectations of $49.09 billion and up 66% year-over-year. Of that, $43 billion came from compute (GPUs), driven by the new GB300 chips, while $8.2 billion came from networking components that enable multiple GPUs to operate together.
Global Tech Stocks React
Nvidia’s strong performance also boosted that of other chipmakers. U.S. competitors saw the following gains:
- AMD: +5%
- Intel: +2%
- ARM, Micron, Broadcom: 1–3%
In Europe, the tech index rose 1.2%, supported by a 2.1% increase in ASML. In Asia, Taiwan’s TSMC climbed 4.3%, South Korea’s SK Hynix gained over 1.6%, and Japan’s Nikkei crossed the 50,000 mark, led by strong demand for AI-related technology.
Analysts praised Nvidia’s execution. JPMorgan highlighted the company’s strong supply chain performance and noted this quarter marked Nvidia’s first acceleration in growth in seven quarters, largely due to rising data-center sales. Forward price-to-earnings ratios put Nvidia at 28.44, below AMD’s 35.70 and far lower than Intel’s 62.38, with expected profit margins around 70% through fiscal 2027.
AI Market Trends and Investment Outlook
The AI market has surged nearly 39% this year. Nvidia’s results helped erase losses from November, and the company’s stock is up more than 1,190% over the past three years. Nvidia became the first chipmaker to surpass a $5 trillion market value, cementing its role in the AI revolution.
The AI boom has also prompted major tech peers, Microsoft, Meta, Amazon, and Alphabet, to raise capital expenditure forecasts, planning over $380 billion in AI investments this year. Huang confirmed that cloud GPUs are sold out, and Nvidia has $500 billion in AI chip orders for 2025 and 2026, with expectations for continued growth.
Despite the optimism, analysts caution about risks such as high capital spending and customer financing challenges. Bob O’Donnell of TECHnalysis Research noted that demand for AI hardware continues to outpace supply, especially among cloud providers and server manufacturers.
Now, Is Nvidia Stock Halal?
Nvidia can be considered halal for Muslim investors. Its core business, designing and manufacturing GPUs for gaming, AI/data centers, professional visualization, and automotive, is permissible under Islamic finance rules.
Financially, Nvidia meets Shariah requirements:
- Interest-bearing debt: well below the 30% limit
- Interest-bearing deposits: below 30%
- Income from impermissible sources: under the 5% threshold
Since Nvidia passes these standards, it can be considered halal, though investors should monitor the company regularly, as financials and activities may change.
